The biggest single spending increase in last year’s bipartisan two-year budget deal was a $540 million boost in education funding — so why are so many Minnesota school districts facing budget deficits?

Twenty-eight school districts in the Twin Cities metro area — and more in Greater Minnesota — say they’ll likely have to cut staff and services if the Legislature doesn’t give public schools some of the state’s projected $1.3 billion surplus. Metro districts have a combined budget gap of $93 million, according to a recent survey.

This year, Minnesota will spend close to $10 billion to educate nearly 900,000 students. Another $3 billion will be raised for schools by local property tax levies.

Yet, Scott Croonquist, executive director of the Association of Metropolitan School Districts, says state funding continues to lag the rising cost of educating students with a growing number of special needs.

Minnesota districts face a $1 billion-a-year gap in the programs they are mandated to provide — such as special education and teaching English learners — and the state and federal funding to pay for it.

Until those gaps are addressed, “We will be back here every year,” said Croonquist, who surveys his 41-member districts each year about their finances. “And we will continue to try to pass local levies.”

Districts have had good luck in recent years — when the economy is good — convincing local voters to increase property taxes for public schools. That’s a lot tougher to do in an economic downturn.

And school advocates say relying too heavily on local levies increases the inequity in school services. Lower-income communities and those without a lot of businesses have a harder time winning support for new school levies.

It’s hard to say what will happen in those districts facing shortfalls — they won’t finalize budgets until spring. But the easiest way to close funding gaps is to cut staffing, which is the largest part of a district’s budget.

WHAT ARE THE CHANCES FOR MORE MONEY?

Sen. Roger Chamberlain, R-Lino Lakes, made clear much of the Legislature’s feelings about another funding boost for public schools.

“We have other priorities right now,” said Chamberlain, who chairs the tax committee in the GOP-led Senate. He’s also a member of the Senate’s education committee, which works to set state education-funding levels every two years.

Republicans say state government was “fully funded” last year and they are focused on cutting taxes this session. They want to give $1 billion of the budget surplus back to taxpayers, mostly in the form of an income tax rate cut and exempting all Social Security from taxes.

Their plans do include some money to increase educational tax credits and to help taxpayers in school districts with lower property values afford levies already on the books.

In the DFL-controlled House, the focus this year is on early-childhood education. Speaker Melissa Hortman wants to spend $500 million of the budget surplus to expand school and day care programs for children 3 and younger.

Much of that money would go to expanding existing programs and maintaining preschool spots that would otherwise lose money. Hortman has noted that much of the $1.3 billion surplus is “one-time” money and said it was smart to spend it on youngsters in their key years of brain development because “you are only 3 once.”

Democratic-Farmer-Labor Gov. Tim Walz, a former teacher, has said his top priority this year is winning approval of a state construction bill. He’s proposed $2 billion worth of maintenance and new projects while Republicans want to spend considerably less.

Walz will provide more details about what he thinks the state should do with the budget surplus after the forecast is updated next week.

AN ANNUAL FUNDING FIGHT

When it comes to education spending, how does Minnesota stack up? The short answer is: about average.

Per-pupil education spending at $12,647 is slightly higher than the national average of $12,201, according to the U.S. Census. The average teacher salary is $57,782, ranking Minnesota 20th in the country, slightly less than the $60,477 average.

That’s all the more reason why the causes of school budget deficits — essentially when districts want to spend more than they can afford — are a routine debate at the Capitol in St. Paul.

School advocates like Croonquist argue that overall school funding hasn’t kept up with inflation while lawmakers continue to add new programs. State funding has grown by more than $1 billion over the past decade, but a lot of those resources have gone toward full-day kindergarten and expanding preschool.

School-spending watchdogs say districts need to live within their means. They argue that districts are too generous with union contracts and benefits for staff that make up about 80 percent of operating costs.

On average, teacher salaries have increased a little more than 2 percent a year over the past two years, according to data from Education Minnesota, the state teachers union. That’s less than the annual rate of inflation, according to the U.S. Department of Labor, but doesn’t include raises teachers get for gaining experience and training.

But it’s more than the 2 percent per year the Legislature has added to the general funding formula schools receive for day-to-day operations.

Denise Specht, Education Minnesota president, acknowledges the challenges school leaders face, especially with a shortage of teachers in key specialties like special education. She noted that health care costs are the most volatile piece of school district budgets.

“We’re aware of the soaring costs of providing health insurance and the upward pressure on salaries caused by the teacher shortage,” Specht said, adding that district leaders were responsible for budgets that provide welcoming and effective schools. “We trust them to do their jobs when they sign employment contracts with teachers and education support professionals.”

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